Palm Inc., a mobile handset company, said Monday it will make a public offering of common stock to boosts its capital ahead of the launch of its anticipated Pre system.
The number of outstanding shares will rise to 23.125 million from 18.5 million and will be offered at $6. Exercising the right to remarket the shares will be held by private equity firm Elevation Partners.
The company said it planned to raise $83.9 million with the new price stock offering and expects to use the proceeds to strengthen its working capital position and to further bolster the resources it is devoting to the launch of the Palm Pre.
In addition, the underwriters will have the right to purchase an additional 3.5 million common shares from Palm to cover over-allotments.
Last week Palm's fiscal third quarter revenue ended to a range of $85 million to $90 million.